Who really gets child benefit?

Cath Elliot says that Osborne’s withdrawal of child benefit from top-rate tax-payers is “an attack on women.” I agree, but not, I fear, for reasons that Cath would like.I refer to this paper by Laura Blow and colleagues:Child benefit is spent, at the margin, on adult-assignable goods…it is parents who benefit from unanticipated variation in child benefit.They estimate that for a couple not on other benefits with one child, a £1 rise in child benefit is associated with a 49p rise in spending on alchohol, a 40p rise in spending on adult’s clothing, but only a 1.4p rise in spending on children’s clothes.For lone parents, 70p of a £1 rise in child benefit is spent on women’s clothing and 21p on alcohol.Osborne’s move is, then, another blow for the drinks industry.This is not because parents are selfish and glug chardonnay whilst their kids play with the traffic. Quite the opposite. Their spending on their children would be heavy anyway, so variations in child benefit lead to variations in spending on themselves. This is a particular instance of a general principle - that the incidence of benefits and taxes does not always fall upon those for whom the tax or benefit is intended.This is not to deny Cath’s point that child benefit is a “life-line for some women”. Quite the opposite. It is exactly that - a life-line for some women, not their children.

OTTAWA — Justin Trudeau is putting his money where his mouth is when it comes to the Conservative government’s newly enhanced universal child care benefit.
The Liberal leader maintains it’s wrong to give the benefit to wealthy families that don’t need help raising their kids. And to underscore that point, he’s going to give his own family’s windfall to charity.
With three young children, one under the age of six, Trudeau is entitled to collect annual UCCB payments of about $3,400.

Sending kids to school has an inbuilt tax advantage for the parents as the tuition fee qualifies for tax benefit under Section 80C of the Income Tax Act, 1961. The amount of tax benefit is within the overall limit of the section of Rs 1.5 lakh a year. For tax purposes, the fee (amount) reduces the total gross income, and thereby the tax liability. Say, you fall in the highest income slab and pay not only a 30.9 per cent tax rate, but also Rs 80,000 a year as schools fees, the tax saved would amount to Rs 24,720 in that year Here's how to get the maximum benefit out of tuition fees.

OTTAWA — Justin Trudeau has unveiled the Liberal alternative to the Harper government’s economic plan: hike taxes for the wealthiest one per cent to pay for more generous child benefits and an across-the-board income tax cut for the middle class.
Under the Liberal proposal announced Monday:

George Osborne, the Chancellor, was last night accused of “family-bashing” as it emerged most parents affected by the child benefit changes will now be hit with tax demands, reports The Telegraph.
Under reforms coming into force today, around 1.1 million earning more than £50,000 a year are set to lose some or all of their child benefit payments, which are worth an average of £1,300 per family.

Don Paskini claims that higher welfare benefits help people find work, pointing out that between 1996 and 2009, the numbers of lone parents in work increased, at the same time as benefits did.His commenters are right to say the evidence doesn’t prove his claim, because perhaps even more people would have found jobs if benefits had been lower. But the evidence does prove something - that higher benefits can be consistent with lower benefit claims.

What do we cut - and who would it hit? When the comprehensive spending review starts in earnest in a few weeks' time, those two questions are going to be right at the centre of public debate.
The Budget on 22 June will set the scale of the challenge: the amount by which spending needs to be cut. The review has to decide the what - and the who.